Track product costs (COGS)

When you track product costs, TALISK_HQ books cost of goods sold as your Shopify payouts post, so your Profit & Loss shows real margin.

It is off until you ask for it. Once you connect Shopify, Books Health offers it on a card, and the card's See both options in Setup button takes you straight to the switch. You can also get there yourself: open the book in Ledger › Setup, click Edit, and under How you track the cost of stock use Track cost of goods sold from Shopify product costs. The same checkbox turns it back off.

This is one of two ways to track the cost of your stock. The other is counting it, which needs no per-product data entry and suits most sellers better to start with. See "Two ways to track the cost of your stock".

Costs sync from Shopify, but some products won't have one. To fill the gaps:

1. Go to Ecommerce › Products, then Missing costs.
2. Enter each product's cost and Save, or import a sku,cost CSV in bulk.

Orders missing a cost are held out of COGS until you supply it (TALISK_HQ never guesses), then catch up on the next payout. With this on, categorize stock-purchase bills to your inventory account rather than a cost account, so cost is recognized when the sale posts. Mark that account first in Ledger › Accounting › Chart of Accounts with the Stock button.

TALISK_HQ records cost as stock sells, but it cannot see your shelves. Once a year or a quarter, count your stock. Record what it was worth in Ledger › Accounting › Stock counts to bring your books to the counted figure, or record just the date in Ledger › Setup under Stock last counted so your reports say how recently the figure was checked.

Which products actually make you money

Ecommerce › Products carries two columns once any product has a recorded cost:

• Contribution is revenue less product cost for the units sold in the period. It is what that product put in your pocket before overheads.
• Margin % is that contribution as a share of the product's own revenue.

The table is sorted by contribution by default, not by revenue, and the gap between those two orderings is the point. Sellers routinely find the product at the top of the revenue list sits well down the contribution list, because volume and margin are different questions. Click either heading to sort the other way, and click Revenue to get the old ranking back.

The two columns rank differently on purpose. A product can be your biggest contributor in dollars while a small one beats it on percentage. Both are worth knowing: one tells you what pays the bills this month, the other tells you what to sell more of.

Why a product shows a dash

A dash means TALISK_HQ has no recorded cost for that product, so there is no margin to show. It will not fill the gap with a zero, because a zero cost would report the product as pure profit.

A product also shows a dash when only some of the units you sold in the period have a cost, which happens when a cost was added part-way through. Showing a margin there would compute it against a cost that is too low and flatter the product. These are exactly the products Missing costs lists, so the two screens always agree.

Products with no recorded cost sort to the bottom of the table in either direction, ranked by revenue among themselves. An unknown is not a small number, and the biggest unknowns are the ones worth costing first.

Under the table TALISK_HQ says how many of your products the margin covers, for example "Margin shown for 11 of 24 products", together with the sales value behind the gap. One product's cost entered is enough to see that product's margin, so there is no need to finish the whole list before the column is worth anything.

If your book does not track cost of goods and has no recorded costs at all, these columns are not shown. An empty column of dashes tells you nothing, and TALISK_HQ does not ask you to turn on something you have not asked for.